Charlie Pring, senior associate at Taylor Wessing, examines the government’s latest alterations to the immigration rules.

It has become a hard task for business owners and managers to keep track of the UK’s immigration rules, let alone understand them. Recently, there has been a raft of changes and limitations introduced on arrivals from outside the EU as part of a drive to reduce levels of net migration.

But while there have been drastic changes to the landscape, there are avenues for businesses to hire highly skilled foreigners. In recent years, a key immigration route for many workers seeking employment in the UK from outside the EU has been the Tier 1 (General) Migrant Visa, which enables migrants to obtain working visas without a job offer.

However, the situation has changed significantly. Following a UK Border Agency (UKBA) study that revealed nearly one third of Tier 1 migrants perform low-skilled jobs on arrival, the agency closed all applications for the visa from abroad on 23 December last year.

While there has been a lifeline for those already lawfully in the UK to apply for the visa before 5 April this year, Tier 1 (General) applications will close completely after this date.

The changes have created a real difficulty for business owners and managers, particularly for small and medium-sized enterprises who have relied on this immigration route for staff, because the direct replacement to the visa will be limited in scope.

There will be a new avenue for workers of ‘exceptional talent’, which is aimed at internationally recognised migrants in the scientific or cultural fields, or those who can show ‘exceptional promise’.  However, there will be limit on these applications, with only 1,000 visas available each year, which means most applications will be declined.

Another valuable route for businesses wanting to attract the brightest and best UK graduates is Tier 1 (Post Study Worker), which is a two-year bridging visa for international students who have graduated from UK universities. Again, the future of Tier 1 (PSW) is uncertain, because it is linked to the agency’s review of student visas that are likely to be slashed in number and limited to certain degree courses.

On the positive side, the UKBA is keen to encourage more migrants to use the route for ‘wealth creators’: Tier 1 (Entrepreneur) and Tier 1 (Investor).  Very few non-European nationals use these routes, because they require a minimum personal investment of at least £200,000 into the UK economy. These routes will not face any limits and, in fact, the agency wants to add flexibility to encourage more applications.

In light of the changes, more employers who would like to keep or recruit workers without general visas may opt for the Tier 2 visa, commonly known as sponsorship. The process involves a business sponsoring a migrant in a skilled role. Before an employer can apply to sponsor a migrant under the Tier 2 rules, they must have a sponsor licence from UKBA. The licence carries a number of responsibilities that must be accepted.

In July last year, the UKBA significantly reduced the number of sponsorships available and from April 2011, there will be a permanent cap of 20,700 Tier 2 (General) visas each year. Also, there will be a monthly allocation of sponsorship certificates, which aims for fairer allocations of the visa that are linked to skills scarcity, but the details have not yet been published.

Following business community lobbying, there is better news for UK companies with overseas offices because there will be no cap on the number of Tier 2 intra-company transfers between group companies.

As always, the devil is in the detail in dealing with immigration rules, and despite much uncertainty, entrepreneurial companies still have options available to hire or keep the brightest and best migrants to help grow their business.